Do you know how your property’s worth affects your remortgage options? Understanding your property’s worth will help you obtain better remortgage offers.
Having valued your property accurately enables you to more confidently obtain the remortgage terms you desire.
Knowledge of your property’s value improves your home valuation for remortgage, giving you better value for your money in the long term.
Takeaways
Accurate property valuation enables a successful remortgage.
Understanding your property’s value enables you to obtain better remortgage offers.
A better valued property decreases remortgage interest.
Prior to remortgage applications, a proper property valuation will be of great benefit.
Understanding Home Valuation for Remortgage
When contemplating a remortgage, for the purposes of obtaining more competitive offers, the property value must be considered. Property value is a key constituent of the remortgage process because it drives the loan-to-value ratio and, in turn, the terms of your new mortgage.
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What is a Remortgage Valuation?
A remortgage valuation is the estimation of market value conducted by a lender-approved valuer. This is needed for a lender to determine the borrowing potential of a customer. A remortgage valuation is not a full survey as there is no need to fully survey a property. A remortgage valuation primarily focuses on value and adequate securitization of the loan risk.
How Valuation Impacts Your Loan-to-Value Ratio
The loan-to-value (LTV) ratio is the most critical element of remortgaging. It is the percentage of the value of the property which is being borrowed against. For example, on a property of $200,000 market value borrowing $150,000 is $200,000×LTV= $150,000, therefore, the property has a LTV of 75%. In general, if the LTV ratio is lower the remortgage rate is better for the borrower. As there is decreased risk for the lender.
When valuations are higher, below LTV ratio 100 will be issued. Lower LTV ratios automatically improve loan remortgaging options.
Types of Home Valuation for Remortgage Used by US Lenders
Types of valuations by US lenders are:
- Desktop valuations – which are done based on property records and existing data.
- Drive-by valuations – wherein the valuer assesses the property from the exterior.
- Full valuations – conducted with a complete assessment of both the interior and exterior.
Each type of valuation has its benefits and determining which type to use hinges on the lender’s needs and the complexity of the property.
What are the Various Aspects Influencing the Value of Your Home?
The home value is based on numerous elements. Each of these elements will need to be weighed when determining. The home’s value for the remortgage. Different aspects will need to be factored in and evaluated when trying to get an accurate home valuation.
The Location and the Trends in the Neighborhood
Among the various factors determining the value of your home, the most important determinant is the home’s location. The value of your property can be significantly affected by the desirability of your neighborhood, including the distance to schools. The availability of public transport, and other amenities.
Local market trends are also highly influential. If property sales and new developments are on the rise, your property will tend to appreciate in value. Conversely, a market downturn will adversely impact value.
“Location, location, location!” remains an old adage, and for good reason. The surrounding neighborhood and environment will most certainly affect your home valuation for remortgage.
Improvements to the Home
Improvements or enhancements will always positively affect the home value. Buyers are highly attracted to properties with upgraded or modernized selling points. Kitchens, bedrooms, and outdoor amenities are key points.
Kitchen renovations. Bathroom upgrades. Additional living spaces. Comparable Property Sales in Your Area.
For determining the value of your home, appraisers look at comparable properties that have recently sold in your area to understand benchmark sales in the local real estate market.
| Property Type | Sale Price | Features |
| 3 Bedroom House | $350,000 | 2 Bathrooms, 1,500 sqft |
| 4 Bedroom House | $420,000 | 3 Bathrooms, 2,000 sqft |
Property Age, Condition, and Special Features
The age and condition of your property significantly impact its value. Enhanced value can be given to properties that are better maintained or have special features such as a garden or a view.
Value and appeal can be added to a property due to special features like energy-efficient upgrades or smart home technology.
Strategies to Maximize Your Property Value Before Appraisal
After a remortgage appraisal has been completed. There are several ways to increase the value of your property. The value of your property appraisal should be accurately represented to ensure better remortgage rates. Increasing the value of your property is not about making it look good, but about strategically increasing it.
Core Repairs and Maintenance
The attractiveness and upkeep of a property form a foundational aspect of a home valuation for remortgage. Core repairs include maintaining leaky faucets, patching damaged walls, and ensuring doors and windows function properly.
- To preserve amenities and avoid deterioration make sure to check for and fix any structural damage.
- Ensure all electrical and plumbing systems are functioning properly.
- Maintain a clean and clutter-free environment.
Increasing a Property’s Value
Consider improvements that will be cost-effective and will increase a property’s value. Consider the following improvements:
- Updated kitchen fixtures and hardware
- Painted walls in neutral colors
- New light fixtures
Increasing the Value of the Property
What is on the outside is just as important as the inside. This is important to improve a property’s curb appeal:
- Having a proper maintained grass lawn
- Having a proper maintained and grass lawn
- Having the outside power washed
Updated Documentation for Home Appraiser
It is important that all relevant documentation is collected to ensure a correct home value is determined for remortgage to conduct proper home appraisal. This should entail:
- Documentation of all recent renovations or upgrades
- Information on any extra features or improvements
- Detailed accounts of previous appraisals, if any
It is recommended that all the documentation is collected to improve value and lower remortgage interest rates. This helps the appraiser understand the value of the home and helps improve remortgage rates.
Conclusion
When figuring out how to remortgage your home, it is important to know how home valuation works. Depending on how the remortgage valuation is done. Your LTV ratio could change interest rates offered to you. Understanding the impact of your home’s location, comparable sales, home improvements, etc. assist you in increasing your home’s value.
When you estimate the value of your home for the mortgage appraisal, the value of your remortgage and your loan terms improve. The impact of your remortgage improvements, necessary repairs, and inexpensive enhancements in value appraisal are important. Effective use of time and preparation of your home to refinance will improve your financial position greatly.
In the United States, the ability to identify the valuation elements has the most impact on remortgage valuation and has the most confidence and control in the remortgage process.
FAQ
What is a home valuation for remortgage?
A home valuation for remortgaging is an assessment of a property’s current market value, used by lenders to determine the loan to value ratio for a new mortgage deal.
How does the loan-to-value ratio impact my remortgaging rates?
The loan-to-value ratio affects your remortgaging rates because, with a lower ratio, lenders view you as a lower risk borrower. Thus, you are likely to receive lower interest remortgaging rates.
What increases my property valuation?
The value of your property increases because you made home improvements, your home is in a desirable location, and sales comparables in your region.
Can I impact my home valuation?
Yes, if you keep your property maintained, perform inexpensive home improvements, and present your home well, then the valuation is likely to increase.
What is the difference between a basic valuation and a full appraisal?
A full appraisal is more comprehensive, providing the property owner with information such as the condition, value of the property, and comparable sales, while the basic valuation is more straightforward, and used primarily by lenders.
How often should I value my property to remortgage?
It is best to value your property for remortgaging when obvious changes such as major renovations have been made. When the value of the property changes dramatically in the market.
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